Consumer Price Index and Inflation

Discussion in 'Economics' started by kennethn, Sep 23, 2011.

  1. kennethn


    Hello everyone,
    I am new to this forum and I wanted to ask a very newbie question,
    The reason I am posting this message is that I am new to learning about economic technical terms and I am researching the Great Depression and previous economic disasters.

    I have been able to find charts on CPI during the Great Depression and I am trying to relate those to inflation and deflation and the abandonment of the gold standard.

    What I don't understand is very basic and it is whether the increase in CPI signified inflation or deflation.

    Logic tells me that and increase in price index is caused by deflation so higher CPI = cheaper dollar and upward slope of CPI = currency inflation. Is this correct?
    I know that the two are not the same thing and that there are better indicators of inflation, but the amount of historical data that's available is scarce.
    I also know that a lot of economic math is often backwards and that's why I need someone to verify this for me or tell me I'm wrong.
    I haven't been able get this basic question answered by articles on CPI and I don't want to get it backwards.

    Thank you very much,